WHY IT MATTERS?

We all—citizens, defence companies, governments, and international organisations—have a shared interest in reducing corruption worldwide.

This isn’t just about commissions on sales: corruption can mean soldiers operating with equipment that doesn’t work, or with no equipment at all. It can mean that well intentioned defence assistance can be subverted by corruption in the destination country.

Societal norms and the attitudes of markets to corruption have changed for the better over the last 30 years. Practices such as facilitation payments and uncontrolled use of intermediaries, once common, are increasingly recognized as poor practice, anti-bribery laws have been passed, and compliance has become part of the lexicon of today’s businesses.

These changes of attitude are happening in defence too, but with greater difficulty. The sale and purchase of weapons usually has a political element, and many defence transactions are protected by secrecy, which can shield companies from scrutiny. Major corruption scandals continue to occur. Two-thirds of companies we studied perform in the bottom half of the index (bands D to F), with limited to no evidence of ethics and anti-corruption programmes.

How can CEOs, government officials, investors and civil society take action to reduce corruption risk in this sector? Click here to read our proposed recommendations.